Orange Abandons LLU Broadband Network To BT

Orange has become the first ISP to hand over its own LLU network to BT in exchange for the possibility of using BT's own rehauled infrastructure to deliver broadband services to new and existing services.

In effect, Orange reversed the tide of the growing number of ISPs (O2, Tiscali and Sky) looking to maintain their own networks and may have chosen this route as its capacity to keep up with the competition both in terms of coverage and overall quality of service is constrained by financial resources and other obligations.

The move by Orange will allow it to double its current coverage and cover nearly two thirds of UK households without having to increase investments significantly.

The France-Telecom owned company has already ploughed hundreds of millions of pounds into a national network but its return on investment has been far from satisfactory as its competitors - particularly O2 - outpaced it.

Orange has around 840,000 broadband customers and this number has been declining steadily amidst reports of poor performance; it upgraded its network to support ADSL2+ speed and offered a raft of new products aimed at differentiating itself from the competition.

Bruno Duarte, Vice-President of Strategy at Orange, told The Times, that the company was not satisfied with where it stood with broadband adding that it needs to remain in fixed-line broadband.

Our Comments

Orange had nearly 1.2 million customers in 2007 at its peak and has lost almost 300,000 customers since then. Arguably, Orange is re-evaluating its overall performance and the forthcoming merger with T-Mobile means that it needs to focus on the mobile market.

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